Investing.com — Tesla continues to be Piper Sandler’s “#1 buy-and-hold idea,” as the firm raised its price target for the stock from $315 to $500.
The firm’s analysts believe investors are beginning to appreciate Tesla (NASDAQ:)’s potential in “real-world A.I.,” which is driving portfolio managers to consider upside scenarios more seriously.
In their recent note, Piper Sandler said it curated over a dozen Tesla-specific datasets.
Despite uncertainties surrounding near-term financials, particularly vehicle deliveries and automotive gross margins, the long-term outlook is said to remain promising.
“We expect Tesla to deliver 1.96M units in 2025 (vs. 1.79M in 2024), but we expect >100k incremental units to come from unknown vehicles, and another 70k incremental units from Cybertruck,” noted Piper Sandler.
However, they caution that this forecast is uncertain and potential downside may not become evident until later updates.
On the gross margin front, Piper Sandler maintains a more positive outlook, expecting solid post-quarter performance as long as Tesla stays on track with new product launches.
Looking ahead, Piper Sandler adjusted its long-term delivery expectations, now predicting Tesla will max out at around 4.6 million units per year by 2032.
The focus, they believe, will shift from launching new cars to popularizing full self-driving (FSD) software.
“We are now modeling a contribution from FSD licensing,” the analysts stated, with Tesla’s existing businesses valued at just below $300 per share, inclusive of FSD.
For valuation, Piper Sandler is transitioning to a P/E-based methodology, with their $500 price target based on 120x FY26E EPS.
They anticipate that within a year, investors will gain greater clarity on Tesla’s product cadence, allowing a focus on more ambitious topics like FSD efficacy and Tesla’s broader A.I. ambitions.
Tesla stock remains Piper Sandler’s ‘#1 buy-and-hold idea’
Investing in Tesla stock has been a hot topic in the investment community, and it seems that Piper Sandler analysts are still very bullish on the electric vehicle company. In a recent report, Piper Sandler reaffirmed their belief that Tesla is their “#1 buy-and-hold idea.”
The analysts at Piper Sandler cited Tesla’s strong leadership in the electric vehicle market, innovative technology, and potential for growth as reasons for their continued confidence in the company. They believe that Tesla’s market dominance will only continue to increase as the world shifts towards cleaner energy and sustainable transportation solutions.
Despite some volatility in the stock market, Piper Sandler remains steadfast in their recommendation to buy and hold Tesla stock for the long term. Investors who are looking for a growth stock with a promising future may want to consider adding Tesla to their portfolio.
As always, it’s important to do your own research and consult with a financial advisor before making any investment decisions. But if Piper Sandler’s track record is anything to go by, Tesla stock could be a strong buy-and-hold opportunity for investors looking to capitalize on the future of electric vehicles.
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